Unions turn backs on Telkom plan to cut jobs

Johannesburg - Telkom South Africa faces a hurdle when it meets with trade unions to discuss plans to cut about 1 000 management positions next week.

The labour unions, representing the bulk of Telkom’s 21 000 employees, intend to reject the company’s proposal because it had not followed the consultation process specified in the Labour Relations Act.

On Tuesday Marius Croucamp, a spokesman for Solidarity, said: “We do not simply accept the cuts”, adding that “Telkom might be in breach of legislation by taking decisions before consulting us.

“Consultation should follow contemplation and not follow notification.”

Telkom is set to meet the unions on Monday, it informed the parties in a notice on Tuesday, to discuss restructuring and retrenchment of about 40 percent of approximately 2 600 managers including specialist positions, according to Karriem Abrahams, the spokesman for the SA Communications Union (Sacu), which represents 3 900 or about 18 percent of the workforce.

Solidarity has about 3 000 members at Telkom.

Sacu will not recognise Telkom’s invitation because it failed to outline the reasons for the proposed dismissals, the process of selecting job cuts, severance packages and alternatives to staff reductions.

Sipho Maseko, Telkom’s chief executive, admitted in an interview previously that he faced staff backlash after hiring management consultants Bain to advise on a cost-cutting strategy to revive the fixed-line operator.

Sinah Pochana, a spokeswoman for Telkom, said the firm was “considering all options in all areas of the business that contribute to cost containment including staff restructuring as part of the company’s turnaround strategy”.

Telkom, which is 40 percent controlled by the government, is under pressure to reduce its workforce by almost a third over five years. It plans to cut R1 billion in costs annually and chop 7 000 staff over the period to reduce a hefty wage bill.

The firm is one of the largest employers in the country. It reported a 2.4 percent increase to R12.4bn in operating expenses during the six months to September. Net revenue rose 1.1 percent to R13.2bn.

The company is upgrading its network infrastructure to become more efficient. It is holding talks with MTN South Africa to take over the financial and operational responsibility for the roll-out and operation of Telkom’s radio access network and mutual roaming between MTN and Telkom networks.

The deal is part of a plan to cut costs from Telkom’s cellphone business Telkom Mobile.

Although relations between Telkom and labour had improved under Maseko, who was appointed a year ago, the retrenchments and handling of the process bred mistrust.

Clyde Marvin, the spokesman for the Communication Workers Union, said the union intended to confront Maseko over his public disclosure of the retrenchments before consulting the unions.

Croucamp said Solidarity was particularly suspicious of the timing of the retrenchment discussions. “It is done very conveniently just after the elections.”

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